No More Free-for-All: Planning the IT Project Roadmap

As they make their way through the office, some CIOs experience awkward interactions when colleagues lobby to move ahead with this or that IT initiative. Apart from their awkwardness, these incidents are symptoms of a broken (or missing) process for deciding the IT project roadmap. No IT leader should have to endure the lobbying that ensues when this process is absent or broken. And no business unit leader should have to be that lobbyist, vying with peers for IT investment dollars outside of a formal project selection structure. Ideally, the IT project roadmap documents the collection of projects which business leaders have decided together to invest in.

Establishing a framework to develop an enterprise’s IT project roadmap should strike business and IT leaders as immediately beneficial. The enterprise-wide advantages to the approach described here include:

  • a dedicated forum for business unit leaders to discuss their priorities for IT investment
  • a basis for assessing impacts of business change to IT project plans
  • a fully-visible, objective and fair process for planning IT investment with input from business stakeholders, to which all parties have agreed in advance: no more free-for-all.

Advocating for and implementing a framework like this is typically the role of the CIO, with the support of the IT PMO, if any. Some leaders prefer to rely on an external partner to initiate the framework and hand it off to internal resources once it’s operational.

This approach was successful at a mid-sized firm whose CIO was wise enough to recognize how a lack of structure created stress and inefficiency. He realized business unit leaders would welcome a formalized, inclusive approach to project selection. Because that firm had an established figure for next year’s IT budget, he sought to identify a group of projects to fit within that number. Other companies calculate their IT budgets by totaling the costs of individual selected projects; this framework will work for either the top-down or bottom-up budgeting scenario.

An inclusive method for selecting projects calls for business unit leaders to evaluate project ideas together against criteria that the leaders have already endorsed. Project ideas progress through these criteria in succession: ideas that meet the first criterion are accepted into the IT project portfolio, those that are filtered out are assessed against the next criterion. Accepted projects are then arranged on a time scale to form the IT project roadmap. Targeting start and end dates helps ensure timing requirements like regulatory deadlines or business events are met, helps balance the load on any resource or group, and provides a basis for impact analysis as IT priorities change throughout the year. Ideally, this exercise would be timed to provide meaningful annual budget input, not only for IT’s budget but also business units’ budgets, since they also may need to commit resources to IT projects.

As with any significant organizational change, support from senior management is crucial. The advantages listed above can help secure sponsorship. CEOs and other senior leaders may want to modify selection criteria, stakeholder representation, or other aspects of this framework before they endorse it. CIOs and other proponents of the framework can tailor the steps below to fit the cultures of their own organizations.

  1. Develop project ideas. These should be brief documents, each structured to provide the same high-level information about each project, to support group decision-making:
  • A forecast of budget and timing. As projects are selected, you can add up these forecasts to know how much of the overall budget remains. If your business units will incur any project costs, note those as well. You can also evaluate the resource commitments at a high level to identify where demand on specific groups might help to sequence efforts. (For instance, a project impacting the ERP team might disqualify another ERP project until the first one is complete.)
  • A description of benefits, where “benefits” is defined broadly enough to include avoidance of risk (including compliance risk). Include estimated cost savings here as well.
  1. Devise the straw-model of successive criteria through which any IT project idea will pass. (Later, you’ll want to review and revise this model with sponsors and business leaders, but having a drafted model ready for stakeholders to modify will yield a more lively and productive exchange than having the group draft it from nothing as a committee.) In this example, the successive criteria are:
  • Will this project secure our compliance? Depending on the line of business, compliance obligations may include SOX, PCI-DSS, HIPAA, GAMP, or other international, government, or industry regulations. The project ideas that pass this filter are given the highest priority, since a business will want to stay in compliance with the regulations which govern it.
  • Will this project ensure continued support of our IT assets? Applications and infrastructure already present in the firm’s IT landscape should be maintained on versions new enough that vendors continue to support these products. Outdated technology represents a technical risk to an enterprise: it’s difficult to address issues with unsupported technology, and harder still to know how much it’ll cost to resolve issues when they occur. In addition, some regulatory bodies require being under warranty as a condition of compliance.
  • Will this project result in all-new opportunities or new lines of business endorsed by the CEO? This criterion is listed in third position (because ideally, staying compliant and current should be a given). In truth, any project that would help secure a big contract (for example) could disrupt the IT project roadmap at any time of year. This reality underscores the importance of having a roadmap ready, as the basis for analyzing impacts of new priorities to project budgets, timelines, and resources.
  • Will the project result in significant reduction of operating costs? The costs evaluated here would include IT infrastructure operating costs as well as business process efficiencies that save money enterprise-wide.

The proposed annual IT budget may be entirely consumed by project ideas that meet the foregoing criteria. Even so, it’s worth it to continue the exercise, so that the full sweep of project ideas is assessed in the initial conversation. It’s always possible that projects are delivered for less than the forecast, in which case dollars can be dedicated to projects that had been deferred.

  • Do a majority of business executives across the board agree that the project idea has merit? This is the first criterion that’s subjective, but it’s targeting project ideas that deliver value for multiple business units. For example, operations, sales, and marketing could all agree that better integration of a recently-acquired subsidiary delivers value for the enterprise as a whole. To resolve ambiguity, when more projects pass this filter than can be accommodated by the budget, you can score and rank the projects based on costs versus benefit, drawing the line where total costs consume the desired budget.
  1. Review participation. With sponsors, determine who will participate in IT roadmap development. Participants should be senior decision-makers from each business unit. If delegates are permitted, they must be fully empowered to represent their business units for the exercise to have meaning. Consider how line-of-business versus staff functions might participate differently.
  2. Kick off IT project roadmap planning. Hold the initial meeting with all participants. Review the benefits of having a roadmap. Help participants to understand their roles. Describe the process this team will undertake to determine which project ideas will move forward.
  3. Review the criteria. Review the drafted criteria with the team. Discuss and modify the drafted criteria to arrive at consensus on final criteria. Consensus is critical for the team’s support of the process.
  4. Review project ideas and select projects. It’s helpful prework to create a table of project idea information so the team can easily analyze, score, rank, and select the projects together. The result of this activity is the IT project portfolio, with costs, durations, resource needs, and benefits forecast for each project.
  5. Arrange selected projects on a timeline. A Gantt chart is helpful to show durations and timing relationships between projects. This exercise helps the team to sequence projects to balance the load on key resources and groups, and to ensure regulatory deadlines and other external business events are accommodated. The result of this activity is the IT project roadmap, with all project start and end times forecast, factoring in resource balancing, as well as external events.

IT is increasingly important to growing revenue, managing operating costs, and staying nimble and compliant. As IT becomes central to business, it’s critical to engage business stakeholders in selecting IT investments. Following a framework that’s endorsed by senior management, an IT project roadmap developed by an inclusive forum of business leaders has far-reaching value. And won’t it be nice to walk to the break room knowing you won’t fall prey to a colleague lobbying for a pet project?